Transcript Homework2
Quiz 2: Specification linked to broadcast media industry This quiz requires knowledge of the case study, the Unit 4b specification and some relevant facts about the broadcast media industry This version is questions only. What market failure means 1 of 2 1. Is broadcast media a merit or demerit or public good – or none of these? 2. Will the free market allocation of resources to the broadcast media industry be too small, too great or optimal? What market failure means 2 of 2 3. What other categories of market failures are there? 1. 2. 3. What externalities are and how they affect an economy 1 of 2 4. If the production or consumption of a good leads to damage to the environment in its widest sense e.g. climate change, increased noise, worse health or the closure of other businesses – then these are known as ... 5. Equally, if the production or consumption of a good leads to benefits for anyone other than the buyer or the seller, then these are known as ... What externalities are and how they affect an economy 2 of 2 6. Over what time period do external costs occur? 7. Why is it difficult to measure the size of external costs? To what extent are externalities acceptable? 1 of 2 8. Is the best way of dealing with demerit goods to stop producing them altogether to eliminate the external costs they generate? 9. Then by what amount should production be reduced? To what extent are externalities acceptable? 2 of 2 10. What is cost benefit analysis? 11. How does it differ from a private company weighing up an investment decision? What can the government do about external costs? 1 of 4 12. What are the three main methods mentioned? 13. Mention any 4 methods of regulation used to control the broadcasting of unsuitable material - What can the government do about external costs? 2 of 4 14. How effective is regulation of the broadcast media industry? 15. Is tax used to control the external costs of broadcast media? What can the government do about external costs? 3 of 4 16. Illustrate the impact of an increase in the Licence Fee on the amount of television watched by a typical household, using a Supply/Demand diagram What can the government do about external costs? 4 of 4 17. How effective is the watershed as a means of reducing the external costs associated with watching TV? 18. How effective are Ofcom’s fines in dealing with ‘adult’ content? Why regulation is needed 1 of 3 19. What is a cartel? 20. Why is a cartel another example of market failure? Why regulation is needed 2 of 3 21. Give an example of a restrictive practice from the broadcast media industry. 22. What is the normal impact of any restrictive practice on price and competition? Why regulation is needed 3 of 3 23. What impact do restrictive practices have on businesses and the consumer. 24. Why are there natural monopolies in the broadcast media industry? What the government does 1 of 5 25. What are the four main roles of the OFT in its mission to ‘make markets work well for consumers’? - What the government does 2 of 5 26. Why did the OFT insist in 2005 that the joint venture TV Eye (jointly owned by ITV, C4 & C5), which sells TV advertising, abandon its joint terms & conditions for advertisers? 27. Why is News International’s current proposal to increase its ownership of BSkyB from 39% to 100% likely to be challenged either by the OFT or by Ofcom? What the government does 3 of 5 28. What are the two main roles of the Competition Commission (CC)? 29. Why did the CC allow the two main ITV franchisees (Carlton & Granada) to merge in 2002? What the government does 4 of 5 30. What are the two main roles of the EU Commission (Competition) under the 1997 EC treaty? 31. Why did the EU issue general guidelines for Public Service (PS) broadcasting in 2009? What the government does 5 of 5 32. What are the typical defences available to BSkyB when faced with accusations of abusing monopoly power, for example in the transmission of sporting events? The effects of these policies and the implications for business 1 of 2 33. Government attempts to correct market failure may themselves fail, resulting in ‘government failure’. Why? The effects of these policies and the implications for business 2 of 2 34. What is the impact of regulation on business costs? 35. What is the impact of regulation on business competitiveness? What the government does 1 of 5 36. Decisions by government with respect to its spending (G) and taxation (T) are known as ......? 37. Decisions by government with respect to interest rates (r) and the money supply (MS) are known as ......? 38. If either fiscal or monetary policy are used to shift Aggregate Demand, this is known as What the government does 2 of 5 39. If AD is shifted out [in], this is known as 40. Examples of expansionary fiscal [monetary] policy are: 41. Examples of contractionary fiscal [monetary] policy are: What the government does 3 of 5 42. Demand management is currently carried out using ... 43. The Bank of England uses interest rates as its tool of monetary policy to hit what target? 44. What policy stance has the Bank adopted recently? What the government does 4 of 5 45. Explain, using the example of a broadcaster, how low interest rates might expand AD 46. Decisions aimed at increasing the productive capacity of the economy are known as ... What the government does 5 of 5 47. If productive capacity is to increase what must happen to a country’s factors of production (inputs)? 48. Why do low interest rates increase an economy’s productive capacity? The effectiveness of government action 1 of 3 49. Name two recent global shocks which have made it difficult to control the UK economy. 50.Why do time-lags make it difficult to control the economy? The effectiveness of government action 2 of 3 51. Why is there a short-term trade-off between unemployment and inflation? 52.Expansionary [contractionary] policy will, other things equal, make short-term business turnover and profits go ... The effectiveness of government action 3 of 3 53. If the UK suffers a worse recession than our trading partners, what impact will this have on our international competitiveness? Why the government redistributes wealth (and income) 1 of 4 54. Why is great inequality of income normally considered a market failure? 55.List 4 causes of inequality within any economy. Why the government redistributes wealth (and income) 2 of 4 56. The situation where earning more money means you take home the same or less in post-tax income plus benefits is known as ... 57.Mention two benefits of inequality to a business. 58. Mention one drawback of inequality to a business. Why the government redistributes wealth (and income) 3 of 4 59. Why might the redistribution of income and wealth lead to greater economic welfare? 60. Why might the redistribution of income and wealth lead to less economic welfare? Why the government redistributes wealth (and income) 4 of 4 61. Mention one business benefit of redistributive policies. 62. Mention one business drawback of redistribution. The implications for business of government regulation 1 of 3 63. As government seeks to encourage the national roll-out of superfast broadband, what impact will this have on the TV and video industry? 64. Why might the prohibition on project Kangaroo increase competitiveness? The implications for business of government regulation 2 of 3 65. How does regulation pose a threat to some businesses? 66. How might regulation encourage innovation? The implications for business of government regulation 3 of 3 67. What would be the impact on international trade of the removal of the current UK requirement that TV news is impartial? 68. What would be the impact on international trade of more marketing restrictions on UK-based gambling sites?